HOUSTON, Aug. 4, 2021 /PRNewswire/ -- Marathon Oil
Corporation (NYSE: MRO) reported second quarter 2021 net income of
$16 million, or $0.02 per diluted share, which includes the
impact of certain items not typically represented in analysts'
earnings estimates and that would otherwise affect comparability of
results. The adjusted net income was $173
million, or $0.22 per diluted
share. Net operating cash flow was $655
million, or $701 million
before changes in working capital.
Highlights
- Strong financial performance highlighted by $420 million of second quarter free cash flow
generation; $863 million of free cash
flow generation through first half of 2021
- Committed to capital discipline with no change to $1 billion 2021 capital expenditure budget;
second quarter capital expenditures of $289
million and first half 2021 capital expenditures of
$473 million
- Second quarter oil-equivalent production of 348,000 net boed;
raising 2021 full year oil-equivalent production guidance by 5,000
net boed
- Second quarter oil production of 170,000 net bopd; no change to
full year 2021 oil production guidance
- Raised quarterly base dividend by 25% to 5 cents per share
- Full redemption of $900 million
2025 maturity in September accelerates $4.0
billion gross debt objective and increases total 2021 gross
debt reduction to $1.4 billion;
shifting return of capital focus to equity holders and retiring
future debt at maturity
- Raising return of capital target to at least 40% of cash flow
from operations to equity holders in a $60/bbl WTI or higher price environment
"I am once again proud of the commitment and dedication of our
employees and contractors to deliver outstanding operational
results while also achieving top quartile safety performance," said
Chairman, President, and CEO Lee
Tillman. "The combination of our high-quality multi-basin
portfolio, our consistent operational execution, and our commitment
to capital discipline has resulted in exceptional financial
results, highlighted by over $850
million of free cash flow generation through just the first
half of this year. Supported by such strong outcomes, we are
raising our quarterly base dividend for the second time this year,
accelerating our balance sheet improvement initiatives, and
enhancing our return of capital framework. We are increasing our
return of capital target to at least 40% of our cash flow from
operations, assuming an oil price of $60/bbl WTI or higher, and expect to shift that
return to equity holders given the strength of our balance sheet.
We continue to believe that our commitment to a transparent and
disciplined capital allocation model, ESG excellence, sustainable
free cash flow generation, and meaningful return of capital is the
best approach to maximizing shareholder value in our industry."
United States (U.S.)
U.S. production averaged 283,000 net barrels of oil equivalent
per day (boed) for second quarter 2021. Oil production averaged
159,000 net barrels of oil per day (bopd). U.S. unit production
costs were $4.41 per boe for
second quarter.
During second quarter, the Company brought a total of 61 gross
Company-operated wells to sales in comparison to guidance of
approximately 70 wells to sales. In the Eagle Ford, Marathon Oil's
second quarter production averaged 91,000 net boed. Oil production
averaged 59,000 net bopd on 45 gross Company-operated wells to
sales. In the Bakken, production averaged 107,000 net boed,
including oil production of 70,000 net bopd. The Company brought 16
gross Company-operated wells to sales in the Bakken. Oklahoma production averaged 54,000 net boed,
including oil production of 12,000 net bopd. Northern Delaware production averaged 24,000
net boed, including oil production of 13,000 net bopd.
International
Equatorial Guinea production
averaged 65,000 net boed for second quarter 2021, including 11,000
net bopd of oil. Second quarter sales totaled 65,000 net boed,
including 12,000 net bopd of oil. Unit production costs averaged
$2.17 per boe. Net income from equity
method investees totaled $49 million
during second quarter.
Guidance
Marathon Oil's 2021 capital expenditure guidance of $1 billion remains unchanged.
The Company is raising the midpoint of its 2021 full year U.S.
oil-equivalent production guidance by 5,000 net boed. All other
full year 2021 production guidance remains unchanged.
Due primarily to continued commodity price strength, the Company
is raising its 2021 E.G. equity method income guidance to
$180 million to $200 million, an increase of over 70% at the
midpoint.
Corporate
CASH FLOW AND CAPEX: Net cash provided by operations was
$655 million during second quarter
2021, or $701 million before changes
in working capital. Second quarter capital expenditures totaled
$289 million.
FREE CASH FLOW: Marathon Oil generated $420 million of free cash flow during second
quarter and $863 million of free cash
flow through the first half of 2021.
ADJUSTMENTS TO NET INCOME: The adjustments to net income for
second quarter 2021 totaled $157
million, primarily due to the income impact associated with
unrealized losses on derivative instruments, miscellaneous asset
impairments, and make-whole premium associated with early debt
retirement.
Accelerating Balance Sheet Improvement
Marathon Oil ended second quarter with total liquidity of
$4.1 billion, which consisted of an
undrawn revolving credit facility of $3.1
billion and $1.0 billion
in cash and cash equivalents. The revolving credit facility was
recently extended from May 2023 to
June 2024. The Company continues to
maintain an investment grade credit rating at all three primary
rating agencies and recently received an outlook upgrade from
stable to positive from Fitch.
In light of continued strong financial performance and
significant free cash flow generation, the Company has given
irrevocable notice of its intention to fully redeem its
$900 million 3.85% Senior Notes Due
2025 with final settlement expected in September of 2021. This
transaction will reduce gross debt by $900
million and accelerates the realization of Marathon Oil's
previously disclosed absolute gross debt objective of approximately
$4.0 billion. The transaction will
bring total 2021 gross debt reduction to $1.4 billion and contributes to approximately
$50 million of annualized cash
interest expense savings. Going forward, the company expects to
retire future debt at maturity.
Base Dividend Increase and Enhanced Return of Capital
Framework
Subsequent to the end of second quarter, the Company raised its
quarterly base dividend, from 4 cents
per share to 5 cents per share, the
second consecutive quarterly increase to the base dividend.
The Company also updated and enhanced its return of capital
framework. Marathon Oil now expects to return at least 40% of its
cash flow from operations, assuming a WTI oil price of $60/bbl or higher, and is shifting its return of
capital focus to equity holders given the strength of its balance
sheet. The company has $1.3 billion
of share repurchase authorization outstanding.
A slide deck and Quarterly Investor Packet will be posted to the
Company's website following this release today, August 4. On Thursday,
August 5, at 9:00 a.m. ET, the
Company will conduct a question and answer webcast/call, which will
include forward-looking information. The live webcast, replay and
all related materials will be available at
https://ir.marathonoil.com/.
Non-GAAP Measures
In analyzing and planning for its business, Marathon Oil
supplements its use of GAAP financial measures with non-GAAP
financial measures, including adjusted net income (loss), adjusted
net income (loss) per share, free cash flow, net cash provided by
operations before changes in working capital and total capital
expenditures.
Our presentation of adjusted net income (loss) and adjusted
net income (loss) per share is a non-GAAP measure. Adjusted net
income (loss) is defined as net income (loss) adjusted for
gains/losses on dispositions, impairments of proved and certain
unproved properties, goodwill and equity method investments,
certain exploration expenses relating to a strategic decision to
exit conventional exploration, unrealized derivative gain/loss on
commodity and interest rate derivative instruments, effects of
pension settlements and curtailments and other items that could be
considered "non-operating" or "non-core" in nature. Management
believes this is useful to investors as another tool to
meaningfully represent our operating performance and to compare
Marathon to certain competitors. Adjusted net income (loss) and
adjusted net income (loss) per share should not be considered in
isolation or as an alternative to, or more meaningful than, net
income (loss) or net income (loss) per share as determined in
accordance with U.S. GAAP.
Our presentation of free cash flow is a non-GAAP measure.
Free cash flow before dividend ("free cash flow") is defined as net
cash provided by operating activities adjusted for working capital,
capital expenditures, and EG return of capital and other.
Management believes this is useful to investors as a measure of
Marathon's ability to fund its capital expenditure programs,
service debt, and fund other distributions to stockholders. Free
cash flow should not be considered in isolation or as an
alternative to, or more meaningful than, net cash provided by
operating activities as determined in accordance with U.S.
GAAP.
Our presentation of net cash provided by operations before
changes in operating working capital is defined as net cash
provided by operating activities adjusted for operating working
capital and is a non-GAAP measure. Management believes this is
useful to investors as an indicator of Marathon's ability to
generate cash quarterly or year-to-date by eliminating differences
caused by the timing of certain working capital items. Net cash
provided by operations before changes in working capital should not
be considered in isolation or as an alternative to, or more
meaningful than, net cash provided by operating activities as
determined in accordance with U.S. GAAP.
Our presentation of total capital expenditures is a non-GAAP
measure. Total capital expenditures is defined as cash additions to
property, plant and equipment adjusted for the change in working
capital associated with property, plant and equipment and additions
to other assets. Management believes this is useful to investors as
an indicator of Marathon's commitment to capital expenditure
discipline by eliminating differences caused by the timing of
certain working capital and other items. Total capital expenditures
should not be considered in isolation or as an alternative to, or
more meaningful than, cash additions to property, plant and
equipment as determined in accordance with U.S. GAAP.
These non-GAAP financial measures reflect an additional way
of viewing aspects of the business that, when viewed with GAAP
results may provide a more complete understanding of factors and
trends affecting the business and are a useful tool to help
management and investors make informed decisions about Marathon
Oil's financial and operating performance. These measures should
not be considered in isolation or as an alternative to their most
directly comparable GAAP financial measures. A reconciliation
to their most directly comparable GAAP financial measures can be
found in our investor package on our website at
https://ir.marathonoil.com/ and in the tables below.
Marathon Oil strongly encourages investors to review the
Company's consolidated financial statements and publicly filed
reports in their entirety and not rely on any single financial
measure.
Forward-looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. All statements, other
than statements of historical fact, including without limitation
statements regarding the Company's future capital budgets and
allocations, future performance, expected free cash flow, future
debt reduction and the timing thereof, balance sheet enhancement,
returns of capital to investors (and the focus of such returns),
business strategy, asset quality, drilling plans, production
guidance, E.G. equity method income guidance and other plans and
objectives for future operations, are forward-looking statements.
Words such as "anticipate," "believe," "continue," "could,"
"estimate," "expect," "forecast," "future," "guidance," "intend,"
"may," "outlook," "plan," "positioned," "project," "seek,"
"should," "target," "will," "would," or similar words may be used
to identify forward-looking statements; however, the absence of
these words does not mean that the statements are not
forward-looking. While the Company believes its assumptions
concerning future events are reasonable, a number of factors could
cause actual results to differ materially from those projected,
including, but not limited to: conditions in the oil and gas
industry, including supply/demand levels for crude oil and
condensate, NGLs and natural gas and the resulting impact on price;
changes in expected reserve or production levels; changes in
political or economic conditions in the U.S. and Equatorial Guinea, including changes in
foreign currency exchange rates, interest rates, inflation rates;
actions taken by the members of the Organization of the Petroleum
Exporting Countries (OPEC) and Russia affecting the production and pricing of
crude oil; and other global and domestic political, economic or
diplomatic developments; capital available for exploration and
development; risks related to the Company's hedging activities;
voluntary or involuntary curtailments, delays or cancellations of
certain drilling activities; well production timing; liability
resulting from litigation; drilling and operating risks; lack of,
or disruption in, access to storage capacity, pipelines or other
transportation methods; availability of drilling rigs, materials
and labor, including the costs associated therewith; difficulty in
obtaining necessary approvals and permits; non-performance by third
parties of contractual or legal obligations, including due to
bankruptcy; changes in our credit ratings; hazards such as weather
conditions, a health pandemic (including COVID-19), acts of war or
terrorist acts and the government or military response thereto;
security threats, including cybersecurity threats and disruptions
to our business and operations from breaches of our information
technology systems, or breaches of the information technology
systems, facilities and infrastructure of third parties with which
we transact business; changes in safety, health, environmental, tax
and other regulations, requirements or initiatives, including
initiatives addressing the impact of global climate change, air
emissions, or water management; other geological, operating and
economic considerations; and the risk factors, forward-looking
statements and challenges and uncertainties described in the
Company's 2020 Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q and other public filings and press releases, available at
https://ir.marathonoil.com/. Except as required by law, the Company
undertakes no obligation to revise or update any forward-looking
statements as a result of new information, future events or
otherwise.
Media Relations Contact:
Rebecca Skiba: 713-296-2584
Investor Relations Contacts:
Guy Baber: 713-296-1892
John Reid: 713-296-4380
Consolidated
Statements of Income (Unaudited)
|
Three Months
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
(In millions,
except per share data)
|
2021
|
2021
|
2020
|
Revenues and other
income:
|
|
|
|
Revenues from
contracts with customers
|
$
|
1,254
|
|
$
|
1,177
|
|
$
|
490
|
|
Net gain (loss) on
commodity derivatives
|
(166)
|
|
(153)
|
|
(70)
|
|
Income (loss) from
equity method investments
|
49
|
|
44
|
|
(152)
|
|
Net gain (loss) on
disposal of assets
|
1
|
|
—
|
|
(2)
|
|
Other
income
|
5
|
|
3
|
|
6
|
|
Total revenues and
other income
|
1,143
|
|
1,071
|
|
272
|
|
Costs and
expenses:
|
|
|
|
Production
|
126
|
|
121
|
|
129
|
|
Shipping, handling and
other operating
|
167
|
|
152
|
|
105
|
|
Exploration
|
25
|
|
21
|
|
26
|
|
Depreciation,
depletion and amortization
|
532
|
|
496
|
|
597
|
|
Impairments
|
46
|
|
1
|
|
—
|
|
Taxes other than
income
|
74
|
|
74
|
|
30
|
|
General and
administrative
|
68
|
|
89
|
|
88
|
|
Total costs and
expenses
|
1,038
|
|
954
|
|
975
|
|
Income (loss) from
operations
|
105
|
|
117
|
|
(703)
|
|
Net interest and
other
|
(59)
|
|
(13)
|
|
(69)
|
|
Other net periodic
benefit (costs) credits
|
(1)
|
|
3
|
|
7
|
|
Loss on early
extinguishment of debt
|
(19)
|
|
—
|
|
—
|
|
Income (loss)
before income taxes
|
26
|
|
107
|
|
(765)
|
|
Provision (benefit)
for income taxes
|
10
|
|
10
|
|
(15)
|
|
Net income
(loss)
|
$
|
16
|
|
$
|
97
|
|
$
|
(750)
|
|
|
|
|
|
Adjusted Net
Income (Loss)
|
|
|
|
Net income
(loss)
|
$
|
16
|
|
$
|
97
|
|
$
|
(750)
|
|
Adjustments for
special items (pre-tax):
|
|
|
|
Net (gain) loss on
disposal of assets
|
(1)
|
|
—
|
|
2
|
|
Proved property
impairments
|
46
|
|
1
|
|
—
|
|
Exploratory dry well
costs, unproved property impairments and other
|
7
|
|
—
|
|
—
|
|
Pension
settlement
|
5
|
|
—
|
|
14
|
|
Pension
curtailment
|
—
|
|
—
|
|
(17)
|
|
Unrealized (gain) loss
on derivative instruments
|
75
|
|
82
|
|
96
|
|
Unrealized (gain) on
interest rate swaps
|
(8)
|
|
(41)
|
|
—
|
|
Reduction in
workforce
|
1
|
|
11
|
|
13
|
|
Impairment of equity
method investment
|
—
|
|
—
|
|
152
|
|
Loss on early
extinguishment of debt
|
19
|
|
—
|
|
—
|
|
Other
|
13
|
|
16
|
|
13
|
|
Adjustments for
special items
|
157
|
|
69
|
|
273
|
|
Adjusted net
income (loss) (a)
|
$
|
173
|
|
$
|
166
|
|
$
|
(477)
|
|
Per diluted
share:
|
|
|
|
Net income
(loss)
|
$
|
0.02
|
|
$
|
0.12
|
|
$
|
(0.95)
|
|
Adjusted net income
(loss) (a)
|
$
|
0.22
|
|
$
|
0.21
|
|
$
|
(0.60)
|
|
Weighted average
diluted shares
|
789
|
|
789
|
|
790
|
|
(a)
|
Non-GAAP financial
measure. See "Non-GAAP Measures" above for further
discussion.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
(In
millions)
|
2021
|
2021
|
2020
|
Segment income
(loss)
|
|
|
|
United
States
|
$
|
207
|
|
$
|
212
|
|
$
|
(365)
|
|
International
|
68
|
|
50
|
|
(6)
|
|
Not allocated to
segments
|
(259)
|
|
(165)
|
|
(379)
|
|
Net income
(loss)
|
$
|
16
|
|
$
|
97
|
|
$
|
(750)
|
|
Cash
flows
|
|
|
|
Net cash provided by
operating activities
|
$
|
655
|
|
$
|
622
|
|
$
|
9
|
|
Changes in working
capital
|
46
|
|
15
|
|
77
|
|
Net cash provided
by operating activities before changes in working capital
(a)
|
$
|
701
|
|
$
|
637
|
|
$
|
86
|
|
|
|
|
|
Free Cash
Flow
|
|
|
|
Net cash provided by
operating activities before changes in working capital
(a)
|
$
|
701
|
|
$
|
637
|
|
$
|
86
|
|
Adjustments for free
cash flow:
|
|
|
|
Capital
expenditures
|
(289)
|
|
(184)
|
|
(126)
|
|
EG return of capital
and other
|
8
|
|
(10)
|
|
—
|
|
Free cash flow
(a)
|
$
|
420
|
|
$
|
443
|
|
$
|
(40)
|
|
Capital
Expenditures
|
|
|
|
Cash additions to
property, plant and equipment
|
$
|
(274)
|
|
$
|
(209)
|
|
$
|
(326)
|
|
Change in working
capital associated with PP&E
|
(15)
|
|
25
|
|
187
|
|
Additions to other
assets
|
—
|
|
—
|
|
13
|
|
Total capital
expenditures (a)
|
$
|
(289)
|
|
$
|
(184)
|
|
$
|
(126)
|
|
(a)
|
Non-GAAP financial
measure. See "Non-GAAP Measures" above for further
discussion.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
Year
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
Dec.
31
|
Net
Production
|
2021
|
2021
|
2020
|
2020
|
Equivalent
Production (mboed)
|
|
|
|
|
United
States
|
283
|
|
276
|
|
307
|
|
306
|
|
International
|
65
|
|
69
|
|
83
|
|
77
|
|
Total net
production
|
348
|
|
345
|
|
390
|
|
383
|
|
Oil Production
(mbbld)
|
|
|
|
|
United
States
|
159
|
|
160
|
|
182
|
|
177
|
|
International
|
11
|
|
12
|
|
15
|
|
13
|
|
Total net
production
|
170
|
|
172
|
|
197
|
|
190
|
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
|
2021
|
2021
|
2020
|
United States -
net sales volumes
|
|
|
|
Crude oil and
condensate (mbbld)
|
159
|
|
159
|
|
183
|
|
Eagle Ford
|
60
|
|
50
|
|
66
|
|
Bakken
|
70
|
|
77
|
|
81
|
|
Oklahoma
|
12
|
|
12
|
|
16
|
|
Northern
Delaware
|
13
|
|
15
|
|
16
|
|
Other United States
(a)
|
4
|
|
5
|
|
4
|
|
Natural gas liquids
(mbbld)
|
60
|
|
53
|
|
56
|
|
Eagle Ford
|
14
|
|
12
|
|
20
|
|
Bakken
|
22
|
|
19
|
|
12
|
|
Oklahoma
|
17
|
|
17
|
|
16
|
|
Northern
Delaware
|
6
|
|
4
|
|
7
|
|
Other United States
(a)
|
1
|
|
1
|
|
1
|
|
Natural gas
(mmcfd)
|
386
|
|
378
|
|
413
|
|
Eagle Ford
|
103
|
|
91
|
|
133
|
|
Bakken
|
90
|
|
93
|
|
60
|
|
Oklahoma
|
150
|
|
145
|
|
167
|
|
Northern
Delaware
|
32
|
|
35
|
|
44
|
|
Other United States
(a)
|
11
|
|
14
|
|
9
|
|
Total United States
(mboed)
|
283
|
|
275
|
|
308
|
|
International -
net sales volumes
|
|
|
|
Crude oil and
condensate (mbbld)
|
12
|
|
9
|
|
16
|
|
Equatorial
Guinea
|
12
|
|
9
|
|
16
|
|
Natural gas liquids
(mbbld)
|
7
|
|
8
|
|
9
|
|
Equatorial
Guinea
|
7
|
|
8
|
|
9
|
|
Natural gas
(mmcfd)
|
276
|
|
295
|
|
354
|
|
Equatorial
Guinea
|
276
|
|
295
|
|
354
|
|
Total International
(mboed)
|
65
|
|
66
|
|
84
|
|
Total Company -
net sales volumes (mboed)
|
348
|
|
341
|
|
392
|
|
Net sales volumes
of equity method investees
|
|
|
|
LNG (mtd)
|
3,094
|
|
3,766
|
|
4,635
|
|
Methanol
(mtd)
|
744
|
|
1,092
|
|
738
|
|
Condensate and LPG
(boed)
|
7,892
|
|
10,730
|
|
10,896
|
|
(a)
|
Includes sales
volumes from the sale of certain non-core proved properties in our
United States segment.
|
Supplemental
Statistics (Unaudited)
|
Three Months
Ended
|
|
June
30
|
Mar.
31
|
June
30
|
|
2021
|
2021
|
2020
|
United States -
average price realizations (a)
|
|
|
|
Crude oil and
condensate ($ per bbl) (b)
|
$
|
64.73
|
|
$
|
55.38
|
|
$
|
21.65
|
|
Eagle Ford
|
65.51
|
|
57.52
|
|
23.53
|
|
Bakken
|
64.15
|
|
53.65
|
|
20.03
|
|
Oklahoma
|
63.77
|
|
55.63
|
|
22.09
|
|
Northern
Delaware
|
65.53
|
|
57.06
|
|
22.36
|
|
Other United States
(c)
|
63.80
|
|
54.83
|
|
18.31
|
|
Natural gas liquids
($ per bbl)
|
$
|
24.17
|
|
$
|
23.94
|
|
$
|
7.09
|
|
Eagle Ford
|
25.80
|
|
24.43
|
|
8.70
|
|
Bakken
|
24.37
|
|
23.22
|
|
2.56
|
|
Oklahoma
|
23.28
|
|
25.08
|
|
8.67
|
|
Northern
Delaware
|
22.63
|
|
22.60
|
|
6.24
|
|
Other United States
(c)
|
21.19
|
|
20.89
|
|
9.68
|
|
Natural gas ($ per
mcf)
|
$
|
2.61
|
|
$
|
6.31
|
|
$
|
1.44
|
|
Eagle Ford
|
3.09
|
|
5.78
|
|
1.69
|
|
Bakken
|
2.13
|
|
2.96
|
|
0.93
|
|
Oklahoma
|
3.01
|
|
8.36
|
|
1.59
|
|
Northern
Delaware
|
1.86
|
|
7.85
|
|
0.88
|
|
Other United States
(c)
|
(1.19)
|
|
6.81
|
|
1.25
|
|
International -
average price realizations
|
|
|
|
Crude oil and
condensate ($ per bbl)
|
$
|
52.78
|
|
$
|
44.13
|
|
$
|
13.79
|
|
Equatorial
Guinea
|
52.78
|
|
44.13
|
|
13.79
|
|
Natural gas liquids
($ per bbl)
|
$
|
1.00
|
|
$
|
1.00
|
|
$
|
1.00
|
|
Equatorial Guinea
(d)
|
1.00
|
|
1.00
|
|
1.00
|
|
Natural gas ($ per
mcf)
|
$
|
0.24
|
|
$
|
0.24
|
|
$
|
0.24
|
|
Equatorial Guinea
(d)
|
0.24
|
|
0.24
|
|
0.24
|
|
Benchmark
|
|
|
|
WTI crude oil (per
bbl)
|
$
|
66.17
|
|
$
|
58.14
|
|
$
|
28.00
|
|
Brent (Europe) crude
oil (per bbl) (e)
|
$
|
68.83
|
|
$
|
60.82
|
|
$
|
29.34
|
|
Mont Belvieu NGLs (per
bbl) (f)
|
$
|
24.81
|
|
$
|
23.98
|
|
$
|
12.25
|
|
Henry Hub natural gas
(per mmbtu) (g)
|
$
|
2.83
|
|
$
|
2.69
|
|
$
|
1.72
|
|
(a)
|
Excludes gains or
losses on commodity derivative instruments.
|
(b)
|
Inclusion of realized
gains (losses) on crude oil derivative instruments would have
decreased average price realizations by $5.54 for the second
quarter 2021 and by $4.61 for the first quarter 2021 and increased
average price realizations by $1.59 for the second quarter
2020.
|
(c)
|
Includes sales
volumes from the sale of certain non-core proved properties in our
United States segment.
|
(d)
|
Represents fixed
prices under long-term contracts with Alba Plant LLC, Atlantic
Methanol Production Company LLC and/or Equatorial Guinea LNG
Holdings Limited, which are equity method investees. The Alba Plant
LLC processes the NGLs and then sells secondary condensate,
propane, and butane at market prices. Marathon Oil includes its
share of income from each of these equity method investees in the
International segment.
|
(e)
|
Average of monthly
prices obtained from Energy Information Administration
website.
|
(f)
|
Bloomberg Finance
LLP: Y-grade Mix NGL of 55% ethane, 25% propane, 5% butane, 8%
isobutane and 7% natural gasoline.
|
(g)
|
Settlement date
average per mmbtu.
|
Full Year
2021
Production
Guidance
|
Oil Production
(mbpod)
|
|
Equivalent
Production (mboed)
|
2Q21
|
2021
Guidance
|
|
2Q21
|
2021
Guidance
|
Net
production
|
|
|
|
|
|
United
States
|
159
|
158 - 162
|
|
283
|
275 - 285
|
International
|
11
|
11 - 13
|
|
65
|
60 - 70
|
Total net
production
|
170
|
169 - 175
|
|
348
|
335 - 355
|
The following table sets forth outstanding derivative contracts
as of August 2, 2021, and the
weighted average prices for those contracts:
|
2021
|
2022
|
|
Third
Quarter
|
|
Fourth
Quarter
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
Crude
Oil
|
|
|
|
|
|
|
|
|
|
|
NYMEX WTI
Three-Way Collars
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
40,000
|
|
|
40,000
|
|
20,000
|
|
|
20,000
|
|
|
—
|
|
|
—
|
|
Weighted average price
per Bbl:
|
|
|
|
|
|
|
|
|
|
|
Ceiling
|
$
|
74.07
|
|
|
$
|
78.05
|
|
$
|
89.46
|
|
|
$
|
89.46
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Floor
|
$
|
48.75
|
|
|
$
|
50.00
|
|
$
|
50.00
|
|
|
$
|
50.00
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Sold put
|
$
|
38.75
|
|
|
$
|
40.00
|
|
$
|
40.00
|
|
|
$
|
40.00
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NYMEX WTI
Two-Way Collars
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
40,000
|
|
|
40,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per Bbl:
|
|
|
|
|
|
|
|
|
|
|
Ceiling
|
$
|
59.41
|
|
|
$
|
58.92
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Floor
|
$
|
39.25
|
|
|
$
|
39.25
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NYMEX Roll
Basis Swaps
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
—
|
|
|
40,000
|
|
45,000
|
|
|
45,000
|
|
|
45,000
|
|
|
45,000
|
|
Weighted average price
per Bbl
|
$
|
—
|
|
|
$
|
1.15
|
|
$
|
0.56
|
|
|
$
|
0.56
|
|
|
$
|
0.56
|
|
|
$
|
0.56
|
|
Natural
Gas
|
|
|
|
|
|
|
|
|
|
|
Henry Hub
("HH") Two-Way Collars
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/day)
|
200,000
|
|
|
200,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per MMBtu:
|
|
|
|
|
|
|
|
|
|
|
Ceiling
|
$
|
3.05
|
|
|
$
|
3.05
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Floor
|
$
|
2.50
|
|
|
$
|
2.50
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
HH Fixed Price
Swaps
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/day)
|
50,000
|
|
|
50,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per MMBtu
|
$
|
2.88
|
|
|
$
|
2.88
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Three-Way
Collars
|
|
|
|
|
|
|
|
|
|
|
Volume
(MMBtu/day)
|
—
|
|
|
—
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per MMBtu:
|
|
|
|
|
|
|
|
|
|
|
Ceiling
|
$
|
—
|
|
|
$
|
—
|
|
$
|
4.50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Floor
|
$
|
—
|
|
|
$
|
—
|
|
$
|
3.50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Sold put
|
$
|
—
|
|
|
$
|
—
|
|
$
|
2.50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
NGL
|
|
|
|
|
|
|
|
|
|
|
Fixed Price
Ethane Swaps (a)
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
5,000
|
|
|
5,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per Bbl
|
$
|
10.92
|
|
|
$
|
10.92
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed Price
Propane Swaps (b)
|
|
|
|
|
|
|
|
|
|
|
Volume
(Bbls/day)
|
5,000
|
|
|
5,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average price
per Bbl
|
$
|
23.19
|
|
|
$
|
23.19
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
The fixed price
ethane swap is priced at OPIS Mont Belvieu Purity
Ethane.
|
(b)
|
The fixed price
propane swap is priced at OPIS Mont Belvieu Non-TET
Propane.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/marathon-oil-reports-second-quarter-2021-results-301348658.html
SOURCE Marathon Oil Corporation